The Walt Disney Co. saw little consumer reaction when it raised the price of Disney Plus by $1 a month earlier this year, clearing the way for more increases in the future.
Speaking at the J.P. Morgan Global Technology, Media and Communications Conference Monday, Disney CEO Bob Chapek said the company was pleased with the price value proposition Disney Plus still offers consumers.
“I think that’s borne out by the fact that in the U.S. when we took our first price increase, we didn’t really observe any significantly higher churn than we had been seeing,” Chapek said.
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On the international front, Disney increased the price of Disney Plus, but simultaneously added content from its Star service.
“We added the Star content at the same time as a sixth brant tile and we actually saw in improvement in our churn rate, more retention,” Chapek said.
That would indicate Disney has pricing power with the product.
“We reserve the right to increase our price value relationship through further pricing actions as we add more and more content and get [ to that point where, you know, we're adding a new piece of content, essentially, every week,” he said.
Chapek was also asked about the ad-supported parts of Disney’s business.
“We've enjoyed double-digit ad growth in addressable advertising,” Chapek said.
The growth is the result of a combination of Disney’s content with its advertising technology.
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“It starts with that unparalleled content,” he said, “but it' also says something I think about our audience-focused data and technology and our ability to make that advertising truly addressable, which were excited about.”
Chapek said Disney’s technology allows its customers to buy self-service programmatic advertising, which he called a much more modern way of transacting.
“There's a lot of behavioral shifts that are happening in the marketplace, whether it's got to do with the consumers themselves, or the advertisers themselves, and we pleased with where we're at,” he said. “We think we're ahead of the market, we're ahead of the curve, and we're seeing tremendous gains and addressable advertising.”
